first of all make sure your tile is able to run small joints. is it pretty square.? if it is usually the tile got a slight bevel on the edges. you can either but them together or use old razor blades that are dull. i personally use little wedges and just insert slightly. the biggie is to find the humps in the wall and use thinset to go over them to give you a flat surface. if its not flat with small joints it will show lippige like crazy!

I use really skinny wood dowels cut into 2" lengths. The grout line width will be determined by the width of the dowel you use. They pull out easily when the thinset is dry. Only do a few rows at a time so the weight of the tile doesn't smash the dowels. Nails would work too depending on the thickness of your tile. You don't pound them in, just use the weight of the tile to hold them in place.